i

INDIA:
MOVING TOWARDS
EQUAL OPPORTUNITIES
FOR ALL?
ii
Author: Lucy Dubochet
Editorial inputs: Nisha Agrawal,
Avinash Kumar, Indrajit Bose
Pictures: Arjun Claire
Oxfam India August 2013
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1. Introduction 1
2. Framing the Inequality Debate 2
2.1. The Richer and the Rest 2
2.2. Missing Jobs, Low Wages and the Grip of Discrimination 3
2.3. Education: Equalitys Fledgling Ground 4
2.4. When the Tightrope has no Net: Walking through 7
Health Hazards
2.5. To Have or Not a Toilet around the Corner 8
2.6. About Networks and Chances 9
2.7. Rents and Redistribution 10
3. Have we factored-in the price? 12
References 13
iv
1
1.Introduction
In India . . . we must aim at equality. That does
not mean and cannot mean that everybody is
physically or intellectually or spiritually equal
or can be made so. But it does mean equal
opportunities for all, and no political, economic
or social barriers. It means a realization of the
fact that the backwardness or degradation of
any group is not due to inherent failings in it,
but principally to lack of opportunities and long
suppression by other groups. Jawaharlal Nehru,
The Discovery of India.
Decades of rapid and unequally shared growth
are adding new dimensions to old disparities
along gender, caste, religious and tribal lines. But
this trend stayed at the margin of public debates
until recently. Discussions about inequality
seemed to evolve in fragmented territories:
economists debated about the comparability of
inequality measures; policymakers discussed the
right balance between growth and inclusiveness;
women, Dalit, Muslim and Tribal activists fought
for their entitlements under the policies set
up to compensate for a history of suppression.
Several recent works of syntheses connect dots
of evidence. They outline a coherent narrative
around a wide spectrum of issuesestimates of
income distribution, stark disparities in human
development outcomes, policy choices and
patterns of exclusion. These various dimensions
build a solid ground to ask more pressingly: how
does the trend impact on Indias society and
its system of governance? Is this what we
aim at? Have we factored in the price of
inequality?
2
2. Framing the Inequality Debate
All countries in the world have inequalities of
various kinds. India, however, has a unique
cocktail of lethal divisions and disparities. Few
countries have to contend with such extreme
inequalities in so many dimensions, including
large economic inequalities as well as major
disparities of caste, class and gender. Jean
Dreze, Amartya Sen, An Uncertain Glory.
2.1. The Richer and the Rest
Data uncertainties have traditionally clouded
assessments of monetary inequalities.
Conventional estimates based on consumption
expenditure suggest that levels of inequality
remained relatively low, despite being on the
rise over the past two decades.
1
However,
recent assessments based on income indicate
that disparities could be on par with some of
the worlds most unequal countries, second
among all BRICS countries (Brazil, Russia,
India, China, South Africa), only to South Africa
(Lanjouw, Murgai, 2011: 25).
2
In terms of trends,
disparities between urban and rural areas have
grown sharply in recent decades and reached
levels close to those witnessed just after
Independence.
Figure: Per capita consumption ratio of urban mean
to rural mean
3
1
Official measures of the GINI based on expenditure, due
to the lack of reliable data on income, for example are a
moderate 0.32, compared to 0.42 in China, 0.4 in Russia, 0.55
in Brazil, and 0.63 in South Africa, at: http://data.worldbank.
org/indicator/SI.POV.GINI. In contrast, estimates of income
GINI are at 0.53; P. Lanjouw, R. Murgai (2011) Perspectives on
Poverty in India, Washington DC: World Bank, at: www.wds.
worldbank.org/external/default/WDSContentServer/WDSP/
IB/2011/05/05/000356161_20110505044659/Rendered/PD
F/574280PUB0Pers1351B0Extop0ID0186890.pdf (accessed
September 2013).
2
Ibid.
3
Ibid.
Income trends at the very top are a marker of
how much Indias richest people benefited during
the recent decades of rapid growth. In the mid-
1990s, India had two resident billionaires with
a combined wealth of $ US 3.2 billion; in 2012
this number increased to 46 with a combined
wealth of US $ 176 billion. Over the same period,
the share of total wealth owned by Indias
billionaires rose from less than 1 per cent of
GDP to 22 percent, when the stock market was
at its peak in 2008, before settling at 10 per
cent in 2012.
4
The identity of todays 46 richest
Indians illustrate social disparities along caste,
religion and gender lines: 28 are from traditional
merchant classes; most others belong to upper
caste communitiesthere is one woman, one
Muslim and no Dalit or Adivasi among them.
Beyond this, estimates based on income tax files
of the richest 0.01 per cent of the population
suggest that income concentration at the top is
increasing rapidly since the 1980s, after three
decades of reduction following Independence.
Between 1981 and 2000, the income of Indias
richest increased annually by 11.9 per cent.
5
In
contrast, the annual increase in real household
expenditure for the entire population over the
same period was 1.5 per cent.
6
At the end of
this period income concentration among the
super rich was comparable to the early 1950s.
With inequalities growing further over the past
decade, concentration has reached levels that
find a comparison only in the colonial era.
These numbers assume their full meaning when
contrasted with how low the scale starts for a
majority of Indians. Indias newly revised poverty
line, set at Rs 32 per day in urban areas and Rs 26
in rural areas, is widely dubbed starvation line
for its failure to ensure anything above the bare
subsistence.
7
The share of population under
this cut off line declined from 45.3 per cent in
1993 to 21.9 per cent in 2012. However, if judged
against the median developing country poverty
line of US $ 2 per day on purchasing power parity,
more than 80 per cent of rural inhabitants and
4
Forbes, Indias 100 riches people, available at: http://www.
forbes.com/india-billionaires/.
5
A. Banerjee, T. Piketty (2004), Top Indian Income: 1922-
2000, London: Centre for Economic Policy Research, at:
http://piketty.pse.ens.fr/files/BanerjeePiketty2004.pdf
(September 2013).
6
Ibid.
7
J. Dreze, A. Sen (2013), An Uncertain Glory, London: Allen
Lane, p. 189.
1950
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1960 1970 1980
year
r
a
t
i
o
1990 2000 2010
3
just under 70 per cent of urban inhabitants would
be categorized as poor.
8
Frequent relapses into
poverty by households located just above the
poverty line complete this picture of vulnerability.
Clearly, benefits have been fragile for a majority
of the population.
To some extent, income inequalities follow
traditional patterns of social discrimination along
caste, gender, religion and tribes. In rural areas,
poverty rates are 14 per cent higher among
Adivasis than among non-scheduled groups and
9 percent higher among Dalits; similarly, in urban
areas, poverty rates among Dalits and Muslims
exceed those of non-scheduled groups by 14 per
cent.
9
Trends in poverty reduction suggest that
these inequalities are growing wider, with an
average annual poverty reduction of 2.1 per cent
among Adivasis and 2.4 per cent among Dalits,
against 2.7 per cent for other groups in rural
areas; in urban areas, the annual pace of poverty
reduction was a meagre 1.8 per cent for Muslims,
2.1 per cent for Dalits and Adivasis, against 2.7
per cent for other groups.
10
These disparities
become critical when regional differences are
taken into account. In Bihar for example, there
are signs that Dalits are, as a group, falling
behind others,
11
whereas Muslims are falling
behind in Uttar Pradesh, Bihar, West Bengal and
Assam.
12
2.2. Missing Jobs, Low Wages and the
Grip of Discrimination
Trends in wages also illustrate how in the past
two decades different sections of the society
have benefitted unequally. Average growth in real
wages has been sluggish, and even turned to the
negatives in the early 2000s.
13
For example, in
8
P. Lanjouw, R. Murgai (2011) Perspectives on Poverty in
India, op. cit, pp. 3-4.
9
These group disaggregated figures date back to the 2009-
2010 National Sample Survey though the calculation is in
line with the Planning Commissions new poverty line quoted
above; Government of India (2012), Press Note on Poverty
Estimates 2012, Delhi: Planning Commission, at: http://
planningcommission.nic.in/news/press_pov1903.pdf
(Accessed September 2013).
10
S. Thorat, A. Dubey (2012), Has Growth Been Socially
Inclusive during 1993-94 and 2009-10? Economic & Political
Weekly XLVII (10), pp. 43-54.
11
P. Lanjouw, R. Murgai (2011) Perspectives on Poverty in
India, op. cit, p. 28.
12
Government of India (2012), Press Note on Poverty
Estimates 2012, op. cit.
13
A. Kundu, P.C. Mohanan (2010), Employment and Inequality
Outcomes in India, Paris: Organization of Economic
Cooperation and Development, p. 28, at: www.oecd.org/els/
emp/42546020.pdf (accessed September 2013).
the agricultural sector, growth in real wages has
dropped from 5 per cent per year in the 1980s
to 2 per cent or so in the 1990s and virtually
zero in the early 2000s,
14
before increasing
again after the introduction of the National Rural
Employment Guarantee Act in 2006, by 2.7 per
cent for men and 3.7 per cent for women between
2005 and 2010.
15
In contrast, the top 0.01 per
cent wages increased by an annual average of 11
per cent in real terms between 1981 and 2000.
16

The absence of a system of social security for
the estimated 93 per cent of the workforce in the
informal sector adds to the significance of these
disparities.
17
It forces poorer households to resort
to informal coping mechanisms with high human
costs when faced with accidents or joblessness.
Important wage disparities exist along gender
and caste lines: in the private sector, the average
wage among casual workers is 40 per cent lower
for women than for men in urban areas and 30
per cent lower in rural areas;
18
only a limited
part of this gap appears linked to differences in
capacities.
19
If considering the entire salaried
workforcecasual and regularestimates based
on data from 2004-5 found that the average wage
for men was two and a half times higher than for
women, on account of womens concentration in
low-paid jobs.
20
This could be one of the factors
that explain the significant drop in womens
workforce participationfrom 33 per cent in
1993 to 25 per cent in 2011at a time when India
witnessed unprecedented growth in GDP.
21
Other
14
Stressed by authors; J. Dreze, A. Sen (2013), An Uncertain
Glory, op. cit.
15
Ibid: 29
16
A. Banerjee, T. Piketty (2004), Top Indian Income: 1922-
2000, London: Centre for Economic Policy Research, at:
http://piketty.pse.ens.fr/files/BanerjeePiketty2004.
pdf(September 2013).
17
A. Senguptaet all (2007), Report on Conditions of Work
and Promotion of Livelihoods in the Informal Sector, Delhi:
National Commission for Entreprises in the Informal Sector,
Government of India, available at: www.prsindia.org/uploads/
media/Unorganised%20Sector/bill150_20071123150_
Condition_of_workers_sep_2007.pdf (accessed July 2013).
18
Calculation based on: Government of India (2013), Key
Indicators of Employment and Unemployment in India, Delhi:
National Sample Survey Office, p. 102.
19
M. Bordia Das (2006), Do Traditional Axes of Exclusion
Affect Labour Market Outcomes in India? Washington
DC: World Bank, at: http://siteresources.worldbank.org/
INTRANETSOCIALDEVELOPMENT/Resources/sdp97-web.
pdf(accessed September 2013).
20
P. Das (2012), Wage Inequality in India, Decomposition
by Sector, Gender and Activity Status, Economic & Political
Weekly, Vol XLVII, No 50.
21
Government of India (2013), Key Indicators of Employment
and Unemployment in India, 2011-12, Delhi: National Sample
Survey Office, available at: http://pib.nic.in/newsite/
4
factors may include mindsets that are adverse
to womens mobility;
22
risks of harassment at
the workplace,
23
the lack of basic amenities like
toilets and crches, and the difficulty to manage
the double burden of household chores and
employment.
Caste-based discriminations have traditionally
confined Dalit workers to casual low-paid labour,
in agriculture notably. The caste system is
evolving with Indias society, but its impact on
employment opportunities is lasting, despite a
slight shift since the 1980s, away from casual
employmentfrom 44.6 per cent to 41.7 per
centand into self-employmentfrom 11 per
cent to 15.6 per cent.
24
Various studies suggest
that caste acts as a glass wall preventing
lower caste groups from accessing well-paid
positions in the regular sector.
25
The profiling of
workers in one ministry drives home the lasting
impact of this dimension even where affirmative
action aims to overcome discrimination: Dalit
representation ranged between 13 per cent in
higher level positions and 18 per cent in lower
level positions; it was 59.4 per cent among
sweepers.
26
Other excluded groups hardly fare better in terms
of employment opportunities. Poor Muslims
remain confined to self-employmentthe
share was as high as 45.5 per cent of them in
urban areas and 24.5 per cent in rural areas in
2011-12.
27
They also have very limited access
to financial assets: they do not own more land
than Dalits and have limited access to credit. As
a result, self-employment largely means low and
irregular incomea situation that translates in
the groups high and persisting levels of poverty.
erelease.aspx?relid=96641(accessed September 2013).
22
The National Family Health Survey (NFHS) found that
only one in three women were allowed to venture alone to
places such as the market, the health center or outside the
community; the percentage was less than 13 among girls from
15 to 19 years of age (IIPS 2007: 512-513).
23
A survey of 400 women working in various formal and
informal sectors finds that 17 percent of respondents had
faced sexual harassment at work; Social and Rural Research
Institute (2012), Sexual Harassment at Workplace in India,
study supported by Oxfam India, Delhi: SRI.
24
M. Bordia Das (2011), Poverty and Social Exclusion in India,
op. cit., p. 18.
25
Ibid; S. Thorat, K. Newman (2010), Blocked by Caste:
Economic Discrimination in Modern India, Delhi: Oxford
University Press, and literature cited there.
26
Ibid, p. 20.
27
Government of India (2013), Key Indicators of Employment
and Unemployment in India, 2011-12, Delhi: National Sample
Survey Office, available at: http://pib.nic.in/newsite/erelease.
aspx?relid=96641 (accessed July 2013).
Dynamics of exclusion have historically played
out differently for the Adivasis, but today they
are concentrated in low-paid casual work in
agriculture, on construction sites and in brick
factories.
The trends above have to be read in light of a
widely noted feature of Indias development
trajectorythe zero job growth.
28
As traditional
livelihoods are being eroded, notably in rural
areas where agriculture does not provide a living
for all, emerging sectors fail to generate enough
employment to compensate for the erosion
or simply match the number of young people
who arrive on the job market every year. This
scarcity further emphasizes the disadvantages
resulting from discriminatory social norms. Even
where traditionally excluded groups are gaining
capabilities by studying more, the competition
with more established groups often prevents
them from translating their greater human capital
into economic opportunities.
2.3. Education: Equalitys Fledgling
Ground
Education is among the biggest watersheds in
Indias landscape of inequalities. As it stands,
it presents a fledgling ground for more equity,
amidst a scenario that is one of the most unequal
worldwide.
Efforts towards universal education were
channeled through the Sarva Shiksha Abhiyan
(the education for all movement) and more
recently through the Right to Compulsory and
Free Education Act in 2010. Progresses are
worth stressing: the near universal enrolment of
children contrasts sharply with the 30 per cent of
men and 60 per cent of women aged 40-59 who
never enrolled.
29
The number of schools with two
rooms nearly doubled between 1996 and 2006,
and drinking water facilities or toilets increased
significantly.
There are signs that certain groups are starting
to overcome their historic disadvantage: Dalit
boys in particular are studying more (see table
below). However, deep inequalities in childrens
28
International Labour Organisation (2013), Global
Employment Trends 2012: Recovering from a Second Jobs Dib,
Geneva: ILO, p. 79, available at: www.ilo.org/wcmsp5/groups/
public/---dgreports/---dcomm/---publ/documents/
publication/wcms_202326.pdf (accessed June 2013).
29
S. B. Desai. A. Dubey, B. L. Joshi, M. Sen, A. Shariff, R.
Vanneman (2010), Human Development in India: Challenges for
a Society in Transition, Delhi: Oxford University Press.
5
access to quality education persist. Girls across
all groups appear to be left behind in secondary
school attendance. In rural areas, the number
of girls who never attended schools was a high
35.8 per cent among Muslims falling in the other
backward class category in 2007-8; it was 29.3
among Adivasis and 24.7 among Dalits against 8
per cent for girls and 4 per cent for boys in other
groups.
30
Boys and to a lesser extent girls in
urban areas fare better but disparities between
groups also affect them.
The actual time spent learning is much lower.
Various surveys across the country suggest that
teaching activities are less than half of what
they would be if all teachers in all schools were
present and actively teaching.
31
According to
Dreze and Sen, the time that is spent learning
when cumulating poor attendance of children
and teacher is no more than one-fourth of what
would happen in a well-functioning schooling
system.
32
30
Government of India (2008), National Sample Survey
64th Round, 2007-2008, Delhi: National Sample Survey
Organization.
31
PROBE Team (1999), Public Report on Basic Education, New
Delhi: Oxford University Press; M. Kremer, k. Muralidharan, N.
Chaudhury, J. Hammer, F.H. Rogers (2005), Teacher Absence
in India: A Snapshot, Journal of Economic Literature, 49.
32
J. Dreze, A. Sen (2013), An Uncertain Glory, op. cit., p. 120.
Learning outcomes reflect these challenges: they
are among the most unequal in the world and are
very poor on average. Across regions, the ability
to read simple texts among government school
pupils aged eight to 11 varied from a low 26 per
cent in Jammu and Kashmir followed by Uttar
Pradesh at 29 per cent and Bihar at 40 per cent,
to a high of 81 per cent in Himachal Pradesh,
followed by 80 per cent in Kerala and 78 per cent
in Tamil Nadu. Furthermore, one striking feature
of this survey is the overall low level across the
country.
33
The PISA 2009+ survey conducted
in 75 countries, including middle and high-
income countries as well as two of Indias best
performing statesHimachal Pradesh and Tamil
Naduindicates that education outcomes
in the two states were comparable only to
Kyrgyzstan and lower than all other countries
surveyed.
34
33
S. B. Desai. A. Dubey, B. L. Joshi, M. Sen, A. Shariff, R.
Vanneman (2010), Human Development in India: Challenges for
a Society in Transition, op. cit., p. 94.
34
M. Walker (2011), Pisa 2009 Plus Results, Camberwell,
Victoria: Australian Council for Educational Research,
at: www.research.acer.edu.au/cgi/viewcontent.
cgi?article=1000&context=pisa.pdf (accessed September
2013).
A creche for children of migrant workers at a construction site
6
For an increasing number of parents, the
response to such dismal outcomes has been to
shift to private schools. According to a survey
by the Annual Status of Education Centre, the
number of children enrolled in private schools
has increased dramatically in the past decade
to reach 28.3 per cent today and could pass
the threshold of 50 per cent in 2018 if the trend
continues.
36
The shift to private schools affects
some children more than others: in 2006, a study
across seven major states of northern India
found that the percentage of boys who go to
private schools, at 24 per cent, was six points
higher than those among girls; only 7 per cent of
Adivasis and 9 per cent of Dalits were registered
in a private school against 33 per cent for general
castes.
37
The above trends point at the risks for children
from poorer, less educated households to be
left behind in neglected government schools.
The Right to Education Act, which relies among
other means on parents involvement to hold
35
Ibid.
36
Annual Statue of Education Centee (2013), Annual Status of
Education Report 2012, Delhi: Pratham, p.4, at: www.pratham.
org/file/ASER-2012report.pdf (accessed September 2013).
37
This was in 2006; today the figures would be higher, but the
differences between social groups are unlikely to be affected;
E. Hill, M. Samson, S. Dasgupta (2011), Expanding the School
Market in India: Parental Choice and the Reproduction of
Social Inequality, Economic & Political Weekly, Vol XLVI,
No. 35.
the system accountable for delivering quality
education, could be undermined if efforts to
improve education prospects increasingly
became a matter of leaving a dysfunctional
government system. The concentration of
groups like Dalits and Adivasis in the public
school system, whose voice has traditionally
been curtailed by dynamics of discrimination, is
another matter of concern in that regard.
On the other hand, the quality of private
schools, while somewhat better on average,
varies tremendously:
38
there are outstanding
institutions and there are obscure enterprises
that sell services of dubious quality, notably in
rural areas where the offer is scarce and parents
with low levels of education have limited scope
to assess the quality of the education provided
to their children.
Kerala, which has the highest percentage of
children enrolled in private schools with some
of the best learning outcomes in the country,
paradoxically illustrates the importance of a
solid foundation of government education.
Privatization was preceded by the creation of
38
W. Wadhwa (2008), Private Schools: Do they Provide Higher
Quality Education, Delhi: Annual Status of Education Report,
available at: http://images2.asercentre.org/Resources/
Articles/art06-ww-private-schools.pdf (accessed September
2013).
Adivasis Dalits Other
Backward
Classes
Muslims Others
11.6
12.7
10.4
8.4
13.5
14.1
11.3
13.4
13.8
12.9
11.4
10.9
14
12.3
10
9.3
10.4
0
3
6
9
12
15
Rural Female Rural Male Urban Female Urban Male
12.5
13.8
13.7
Figure: Percentage of population aged 5 to 29 that attended secondary school (2007-8)
7
a quality government school system.
39
As a
consequence, Kerala is one of the few states
where the difference in learning outcomes
between government and private schools
disappears if controlling for other significant
variables like parents education and income.
40

Without a strong public education system, the
risk exists that timid progress towards greater
equity of opportunities will be undermined, as
richer and more educated parents afford quality
schools for their children, the relatively less
fortunate have to make do with mediocre private
schools, and the poorest are left to bear with a
fledgling government system.
2.4. When the Tightrope has no Net:
Walking through Health Hazards
At 1 per cent of GDP, Indias public spending on
health is one of the lowest worldwide.
41
Private
funds complete the countrys total expenditure
on health, at 4.5 per cent of GDP. Direct payments
during treatment constitute more than 70
per cent of expenditure.
42
Indias government
39
For this argument, see: J. Dreze, A. Sen (2013), An Uncertain
Glory, op. cit., p.
40
Ibid.
41
World Bank data: public health expenditure, http://data.
worldbank.org/indicator/SH.XPD.PUBL/countries, (accessed
October 2012).
42
Ibid.
health system showcases the symptoms of its
neglect: infrastructure is decaying; shortage of
staff is severe; drugs are rarely available. Poorly
regulated private providers have spread in the
vacuum, and today account for 82 per cent
of patient care. The quality of services varies
tremendously: a few outstanding institutions
contrast with a large number of inadequate
offers;
43
the plethora of offers in urban centres
contrasts with the scarcity in rural areas: with
0.2 hospital beds per 1,000 people, against 2.5
recommended by the WHO, physical access to
hospitals and doctors has become an obstacle in
rural India.
44
Indias poor health indicators are a consequence
of this situation. Life expectancy, at 65 years,
is the lowest in South Asia and comparable only
to Pakistan. The difference between the richest
and the poorest 20 per cent is 11 years. The
gap increases further if adding group-specific
vulnerabilities: on average Adivasi people who fall
43
In rural Rajasthan, about 40 percent of private providers
did not have a medical degree, and almost 20 percent had
not completed secondary school education. A. Banerjee,
A. Deaton, E. Duflo (2003), Healthcare delivery in rural
Rajasthan, Economic & Political Weekly (39): pp. 94449.
44
K. Yadav, P. Jarhyan, V. Gupta, C. S. Pandav (2009),
Revitalizing Rural Healthcare Delivery: Can Rural Health
Practitioners be the Answer? Indian Journal of Community
Medicine 34(1), pp. 3-5.
A private hospital, Delhi
8
under the poverty line live 16 years less than the
countrys richest 20 per cent, and this figure, at
57 years, has decreased marginally over the past
20 years.
45
Other indicators show similar disparities. For
example, the average under-five mortality rates
at61 per 1000 births are higher than in other
South Asian countries; they further increase to
88 among Dalits and 96 among Adivasis.
46
The
health crisis in remote regions shows starkly
in poor health indicators among the Adivasis.
However, the poorest 20 per cent of Indias urban
population fares hardly better, with under-five
mortality rates at 92 per 1000 children. This
shows that a quality network of private providers
can hardly be the solution for the poorest without
addressing issues of access.
The reliance on private expenditure adds one
important dimension to those mentioned so far:
the unequal vulnerability to risk. The percentage
of Indias population that falls below the poverty
line because of health expenditure has been
increasing steadily in recent years. The latest
45
S.K. Mohanty, S. Ram (2010), Life Expectancy at Birth Among
Social and Economic Groups in India, Mumbai: International
Institute for population Science, http://www.iipsindia.
org/pdf/RB-13%20file%20for%20uploading.pdf (accessed
October 2012).
46
International Institute of Population Sciences (2007), Key
Findings, National Family Health Survey-3, 2005-06, Mumbai:
IIPS, p. 181, at: www.measuredhs.com/pubs/pdf/SR128/
SR128.pdf (accessed June 2013).
estimate, which dates back to 2005, is at 6.2
per cent per year.
47
More than 40 per cent of
the population has to borrow or sell assets for
treatment, according to the 2004 National Sample
Survey. With no solid government system, people
are left with little else than their individual assets
when faced with hazards of life: those who have
savings and network walk the tightrope; others
are left without a net.
2.5. To Have or Not a Toilet around the
Corner
This discussion would not be complete without
getting down to the basics. According to the
latest census, one in two Indians had to practice
open defecationa figure that is one of the
highest worldwide.
48
Here again, disaggregated
figures shows the lasting impact of dynamics of
exclusion: in urban areas, where progresses in
sanitation over the past decade have brought
down the share of people without access to
a toilet from 30.6 per cent in 1993 to 11.3 in
2009, some groups are left behind:
49
more than
47
P. Berman, R. Ahuja, L. Bhandari (2010), The Impoverishing
Effect of Healthcare Payments in India: New Evidence and
Methodology, Economic & Political Weekly (XLV:16), pp. 65-
71.
48
J. Dreze, A. Sen (2013), An Uncertain Glory, op. cit., p. 279.
49
D. Mahadevia (2013), Urban Poverty in India and Post-2015
Framework, Delhi: Oxfam India, pp. 8-9, at: www.oxfamindia.
org/sites/default/files/Working%20paper%2017.pdf
(accessed September 2013).
A government district hospital, Bihar
9
59 per cent of Muslim households continue to
have no access to a toilet at home or in their
surrounding; other below poverty line households
fare only slightly better, with 54 per centa
share that contrasts sharply with the average
population at 11 per cent (see graph: access to
basic sanitation services). While disparities are
slightly less striking, a significant number of poor
people from excluded groups continue to have no
access to other basic sanitation aspects such as
safe drinking water and connection to covered
drainage. Such disparities disproportionally
affect women, who are traditionally responsible
for fetching water, and who face greater risks
and humiliation without a toilet of their own.
Dreze and Sen have forcefully argued that
inequality takes a different meaning when the
most basic needs of those at the lower end of
the scale are not met.
51
They further note that
public debates in India have often lost sight of
the cruder reality of the bottom 30-50 per cent
by focusing instead on the relative deprivation
of the middle class. This question is raised by
the above disparities: at the end of two decades
that have seen annual levels of growth in GDP
averaging more than 8 per cent in major cities,
why have basic infrastructures that have such
fundamental importance for health, security and
wellbeing of the poor been so neglected? Why
are policy debates on these issues so few?
50
Ibid.
51
J. Dreze, A. Sen (2013), An Uncertain Glory, op. cit., p. 279.
2.6. About Networks and Chances
The complex and evolving dynamics that underlie
disparities along gender, caste and religious
lines call for a more nuanced discussion than can
be developed here. However, one dimension is
worth stressing before concluding these framing
sections: the power of social networks.
When jobs are very few and mostly informal,
healthcare not guaranteed, and places in good
schools terribly scarce, networks are powerful
vectors of opportunity. The importance of Dalit
networks for example in supporting individual
members of the community to cope with hazards
of life is well established,
52
as is their role in
defining economic opportunities among self-
employed Muslims.
53
Across groups, evidence
exists of the link between social networks and
the ability to access loans, or quality healthcare
and schooling.
54
Their role as vectors of discrimination is no less
important. The Indian Human Development Survey
confirms that Adivasis, Muslims, Dalits, and
women across all groups have very few contacts
within the government, education and health
systems compared to other groups.
55
Adivasis are
52
M. Bordia Das (2011), Poverty and Social Exclusion in India,
op. cit., p. 21, and literature cited there.
53
T. Fazal, Muslims of India: Vulnerabilities and Needs,
Oxfam India Working Paper (publication forthcoming).
54
S. B. Desai. A. Dubey, B. L. Joshi, M. Sen, A. Shariff,
R. Vanneman (2010), Human Development in India: Challenges
for a Society in Transition, op. cit., p. 178.
55
Ibid.
28.5
21.1
21.5
29.1
22.7
22.1
30.9
59.1
15.2
36.9
54.2
26.2
23
11.3
14.8
Adivasis Dalits Muslims Below Poverty All urban
No access to drinking water No access to toilets No access to drainage
0
10
20
30
40
50
60
Figure: Access to Basic Sanitation Services
10
particularly vulnerable in that regard: two out of
three had no contact at all in any of the positions
above; this compares with less than one out of
three among upper caste people. At the village
level, the importance of caste networks in
channeling service delivery is a noted feature of
local politics.
56
Numerous studies point at the importance of
caste networks in the private sectorstarting
from prospects of recruitment and wages,
57

ownership of companies,
58
or representation
in corporate boards.
59
Liberal professions are
no exception in this regard. A recent survey of
various liberal professions in Allahabad shows
the dominance of upper caste groups: two
upper caste groups represent an overwhelming
majority75 per cent of average and up to
100 per cent in some sectors in positions of
leadership at the press club, the bar association,
trade and teacher unions, publishers, NGO
workers and faculty.
60
This figure compares with
20 per cent representation of these groups in the
citys population as a whole.
2.7. Rents and Redistribution
The cohabitation of persisting poverty and
of highly concentrated wealth is a complex
problem that cannot be wished away with simple
solutions. However, experience from countries
like Brazil show that inequalities can be reduced
by ambitious investments in basic services and
conditional cash transfers. Examples such as
Kerala show how a quality education system can
help reduce inequality of learning outcomes.
At an all-India level, the governments flagship
National Rural Employment Guarantee Act has
helped redress depressed wages of unskilled
rural workersnotably for women who are at the
very bottom of a strongly unequal scale.
However, these measures require resources,
and Indias share of public spending on social
56
S. Corbrige, G. Williams, M. Srinastava, R. Veron (2005),
Seeing the State: Governance and Governmentality, Cambrige
University Press.
57
See section above: Missing Jobs, Low Wages and the Grip
of Discrimination.
58
S. Thorat, K. Newman (2010), Blocked by Caste: Economic
Discrimination in Modern India, op. cit., pp. 311-327.
59
D. Ajit, H. Donker, R. Saxena (2012), Corporate Boards in
India: Blocked by Caste? Economic & Political Weekly, Vol
XLVII, No 31.
60
A. Agarwal, J. P. Dreze, A. Gupta (2013), Notes on the Caste
Composition of Public Institutions in Allahabad, Department
of Economics Allahabad University.
services is among the lowest worldwide.
The situation may be most dramatic in the
health sector, at 1 per cent of GDP against
the 6 per cent recommendation of the World
Health Organisation,
61
but the 3.5 per cent
of GDP for education also is much below the
recommended threshold.
62
Some other major
policies are similarly underfundedthe 2006
Protection of Women from Domestic Violence
2006 for example has been implemented with
virtually no funds from the central government.
63

Furthermore, without financial means, measures
as fundamental as social security for the majority
of informal workers will remain unconceivable.
There are of course other challenges such
as bottlenecks for disbursement and issues
related to accountability. Nevertheless, stable
and adequate funding would certainly play an
important role in overcoming these systemic
issues.
Can India afford it, only five years after the
country passed the threshold of US $ 1005 per
capita gross national income that according
to the World Bank distinguishes middle income
countries from poorer ones?
Indias total tax to GDP ratio, at 15.5, is among the
lowest of all G20 countries just above Mexico and
Indonesia, and far below other BRICS countries.
India also stands out for its small share of direct
taxes on income and wealth, at 37.7 per cent
against an average of 53.7 per cent for the
OECD.
64
Instead the country relies on indirect
taxes, which apply to goods and services,
allowing only a rough distinction between
poorer and richer clients based on product
types. Income taxes as a share of GDP have been
stagnant for the past two decades: the share of
population subjected to income taxes in India
61
D.B. Evans, R. Elovainio, G. Humphreys (2010), Health
System Financing, The Path to Universal Coverage, Geneva:
World Health Organisation, p. xv, http://www.who.int/
whr/2010/en/index.html, (accessed October 2012).
62
Available at: http://data.worldbank.org/indicator/
SE.XPO.T.GD.ZS (accessed September 2013).
63
Lawyers Collective (2012), Staying Alive, 5th Monitoring
& Evaluation on the Protection of Women from Domestic
Violence Act, Delhi: Lawyers Collective and International
Centre for Research on Women, at: www.lawyerscollective.
org/files/Staying%20Alive%205th%20M&E.pdf (accessed
November 2012).
64
P. Prakash (2013), Property Taxes Across G20 Countries:
Can India Get it Right?, Delhi: Oxfam India, Centre for Budget
Governance and Accountability, p. 4, at: www.oxfamindia.org/
sites/default/files/Working%20paper%2015.pdf(accessed
September 2013).
11
has remained at 2-3 per cent between 1986 and
2008; in China it rose from 0.1 per cent to 20 per
cent over the same period.
65
Similarly, the share
of income tax to GDP remained at around 0.5
per cent in India, while it rose from 0.1 per cent
to 2.5 per cent in China.
66
It may be argued that
with nearly 93 per cent of the population in the
informal sector and a majority of people that
continue to live not far above the poverty line,
taxing income is a greater challenge in India.
However, even if focusing on the super rich,
Indias maximum tax rate imposed on the highest
incomes dropped from 60 in 1979, to 50 in 1990,
and was further reduced to 33 in 2002. Today,
India firmly stands among the countries with
lowest marginal tax rates in the worldwith just
a few places like Honk Kong, Russia, Bolivia and
Brazil below that.
The situation is not much different for wealth.
The tax on inheritance was abolished in 1985;
the tax on wealth is so low that its revenue as
percentage of GDP cannot be estimated.
67
The tax
on property, at 0.4 per cent of GDP, is also one of
the lowest across all G20 countries, higher only
to Indonesia and Mexico.
68
These trends in taxation policies take their full
meaning in light of the imbalance between return
on wealth and return on labour. The imbalance
is crude in India, where wages are depressed by
a job offer that does not match the demand for
employment of a mass of poorly trained labourers
with no social security to fall back on. To take
just one example, investors promise between
12 and 15 per cent annual return on a long-term
investment in property in some of Indias rapidly
developing cities. This contrasts with stagnant
real wages of casual workers in urban areas.
Why do Indias richest people contribute so
little when income concentration at the top has
reached levels unseen since Independence, and
when the government is in dire need of funds to
finance fundamental public reforms? The trend
raises questions about the power of the richest
to influence political processes and policies in a
65
T. Pikettty, N. Qian (2009), Income Inequality and
Progressive Income Taxation in China and India, 1986-2015,
American Economic Journal 1:2, p. 54, at: www.econ.yale.
edu/~nq3/NANCYS_Yale_Website/resources/papers/
PikettyQianAEJ.pdf (accessed September 2013).
66
Ibid.
67
P. Prakash (2013), Property Taxes Across G20 Countries: Can
India Get it Right?, op. cit, p. 9.
68
Ibid, p. 8.
way that suits their interest.
Stark debates around the governments
announcement that it considers introducing an
inheritance tax illustrate these plays of power.
Debates about Indias subsidies do too. The Food
Security Bill, which provides subsidized food to
poor households, is a case in point. The cost of
the policy, at 1 per cent of GDP is not negligible,
and the law has been fiercely criticized for the
burden it would impose on public finances. In
contrast, the government has so far renounced
reducing fuel subsidies that represent 1.9
per cent of GDP on account of widespread
resistances.
69
Studies suggest that benefits of
the fuel subsidy could be up to seven times more
for the 10 per cent richest households than for
the 10 per cent poorest.
70
69
R. Anand, D. Coady, A. Mohommad, V. Thakkor, J. P. Walsh (),
The Fiscal and Welfare Impacts of Reforming Fuel Subsidies
in India, Washington DC: International Monetary Fund, p. 10,
at: www.imf.org/external/pubs/ft/wp/2013/wp13128.pdf
(accessed September 2013).
70
Ibid; also see: R. Lahoti, J.Y. Suchitra, P. Gautam (2012),
Subsidies for Whom: The Case of LPG in India, Economic &
Political Weekly, Vol. XLVII, No. 44.
12
3. Have we factored-in the
price?
This is about why our economic system is
failing for most (of us), why inequality is growing
to the extent it is, and what the consequences
are. The underlying thesis is that we are paying
a high price for our inequalityan economic
system that is less stable and less efficient, with
less growth, and a democracy that has been
put into peril. Joseph E. Stiglitz, The Price of
Inequality.
Until recently, letting some move ahead of others
may have seemed a requirement to generate the
growth required to lift the majority out of poverty.
Today, evidence from India and from other
countries provides a ground to ask afresh where
to set the balance of growth and inclusiveness.
To conclude this discussion, we may ask whether
the sentence from Joseph Stiglitzs book about
the United States speaks to the situation in India.
The questions bellow will help factor in the price
of inequality for India.
Is it effective? Evidence across the world shows
the high price of inequality for the wellbeing
of not just those at the bottom, but for all. A
highly unequal health system reduces health
outcomes of the entire population. Dismal
education opportunities among a large section
of the population harm the economy as a whole.
Deplorable sanitation in slums and rural areas
cause dangerous pollutions, not just for those
directly affected.
Is it safe? Studies across the world suggest that
one of the costs of inequality could be rise in
crime. In India, the relation has not been studied
systematically and the lack of reliable crime
data calls for prudence. However, recent trends
in violence suggest that the correlation maybe
worth probing. What if, for example, there was a
link between rising inequalities and recent series
of sexual crimes that have spurred emotions
across the country? Beyond this, how will the
rise of inequality affect the fragile unity between
communities whose history is marked by violent
clashes? Will income inequalities that have
grown along differences of caste and religion
spur communal violence? Predictions may not
be prudent, but examples from other countries
suggest that the risk needs to be factored in
much more seriously than it is currently.
Is it compatible with democracy? Monetary
inequality has reached levels never seen since
Independence. Indias democracy is formally
strong, but imbalances in power and voices
have since the beginning challenged its
depth. Mandated political representation for
discriminated groups and better education have
resulted in tremendous progress, but have not
overcome traditional disparities of power and
influence. The focus of public debates on issues
that affect the relatively richer suggest that
rising inequalities could unduly tilt the balance of
public attention towards the richer. The series of
scandals linking big money with political power
is another sign that increasing concentration
of wealth could have a price for the countrys
democratic institutions.
Does it allow equal opportunities for all? The
discussion above highlights how monetary
inequalities have grown dramatically along
existing lines of social divide: the richest have
gained tremendously, while average income
has lagged, undermined by a scarcity of
productive jobs and low wages; groups such
as Dalits, Adivasis, Muslims and women have
fared much worse on average. These economic
trends interact with non-monetary dimensions,
such as the divide between those who can
afford services of private health and education
providers and those who rely on a neglected
government system. Furthermore there are signs
that recent trends could undermine fledgling
efforts towards greater equity, in education
notably. These different dimensions combine to
create a society that is very distant from the idea
of equal opportunity stated along the values of
justice, liberty and fraternity in the Preamble of
the Constitution, and mentioned again as one of
the Directive Principles of State Policy. In light of
this we may ask again: is it what we aim at? Have
we factored in the price?
13
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